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CUs among record CDFI Fund awardees

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WASHINGTON (8/7/12)--The U.S. Treasury Department's Community Development Financial Institutions Fund (CDFI Fund) announced Monday that it awarded a total of $186,853,456 to 210 organizations serving low-income communities, including credit unions or credit union organizations, as it closed it fiscal year (FY) 2012 grants and awards program.

The FY 2012 awards, provided through the CDFI Fund's Community Development Financial Institutions Program (CDFI Program) and the Native American CDFI Assistance Program (NACA Program), represent the largest single announcement of award dollars and award recipients in the CDFI Fund's history.

Through the CDFI Program, 22 credit unions were among the 177 organizations to receive a total of $152,281,326 in Financial Assistance (FA) or Technical Assistance (TA) awards. A total of 144 FA and 33 TA awards were made to credit unions, loan funds, venture capital funds and depository institutions/holding companies.

In addition to the CDFI Program's Financial Assistance and Technical Assistance awards, the CDFI Fund also awarded additional funds to 12 organizations that requested and qualified for Healthy Food Financing Initiative Financial Assistance (HFFIFA). HFFIFA is an interagency initiative involving the CDFI Fund, the U.S. Department of Health and Human Services, and the U.S. Department of Agriculture and is intended to increase the supply of and demand for nutritious foods in low-income urban and rural areas in the U.S.

Under the NACA Program for FY 2012, 33 organizations--including four credit unions--received a total of $11,473,647 in awards, all of which were grants.  In addition to the credit unions, 28 loan funds and one bank or thrift received awards.

The NACA Program encourages the creation and strengthening of certified CDFIs that primarily serve Native American, Alaska Native, and Native Hawaiian communities.

Use the resource link to go to the CDFI Fund website to read more about the grants.

CUNA urges NCUA on new reg relief steps

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WASHINGTON (8/7/12)--Noting that the cumulative regulatory burden on credit unions is at an all-time high, the Credit Union National Association (CUNA) in a comment letter urged the National Credit Union Administration (NCUA) to develop a new advisory council to discuss developing problem areas and trends with the credit unions it regulates.

The advisory council could also identify barriers that prevent some credit unions from serving their members to the fullest extent possible, and discuss incentives that could help credit unions improve their member service. CUNA also suggested the advisory council could "serve as a useful sounding board as the agency develops proposals and directives for the credit union system."

The CUNA recommendations were included in the group's comments regarding the NCUA's annual request for comment on one-third of its rules, an ongoing effort by the agency to reduce redundancies and other burdens.

In that letter, CUNA also presented a series of regulatory relief recommendations that would help relieve credit unions while preserving legal requirements.

"There are many critical regulatory issues facing credit unions today and improving the regulatory environment for credit unions is absolutely essential for their sustainability and continued success in serving their members," CUNA said.

Another way the agency could improve the regulatory environment for credit unions, CUNA suggested, is shielding well-managed, well-capitalized credit unions from member business lending (MBL) regulatory requirements that are not specifically stated in the Federal Credit Union Act.

MBL rules that require credit unions to obtain personal guarantees from borrowers, and certain other rules addressing loan-to-value ratios, construction and development loan limits and appraisal requirements, are among those that could be eliminated for these credit unions, CUNA said.

CUNA also urged the agency to amend its policy regarding renting real estate owned (REO) properties. Under the NCUA's current policy, federal credit unions must commit to a plan to actively promote an REO property for sale and seek a buyer, with the expectation that it will collect on the sale within 12 months, even if the property has renting tenants.

CUNA suggested the NCUA could relax this policy, noting that "it is often more difficult to rent a property if the tenants are concerned the property is being marketed." Amending the NCUA's position on REOs as rentals could maintain property values and the quality of surrounding neighborhoods--the very neighborhoods in which the credit union may hold, service, or originate other mortgages," CUNA said.

In the letter, CUNA also addressed the NCUA's small credit definition and issues related to mergers and conversions, investment and deposit activities, chartering, and loan participations, among other issues.

CUNA urged the agency to work review the regulatory relief recommendations in a timely manner, and assemble a final package of regulatory relief measures that could be implemented this fall.

For the full letter, use the resource link.

FTC seeks comment on Web privacy for children

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WASHINGTON (8/7/12)--Credit unions that offer programs and products aimed at children--like an online savings club for kids--would have to take additional steps to get parental permission before obtaining information from the children, as a result of proposed rules issued for a 30-day comment period by the Federal Trade Commission (FTC).

The rule would clarify the definition of which entities would be required to obtain parental consent before collecting information about users under 13.  Its focus would be on third-party partners.

Currently, websites aimed at children must receive parental permission before collecting identifiable information such as names and e-mail addresses.

The FTC said the 1998 Children's Online Privacy Protection Act, which mandated parental permission in many cases, "did not foresee how easy and commonplace it would become for child-directed services to integrate social networking and other personal information collection features into the content offered to their users, without maintaining ownership, control, or access to the personal data."

Written comments must be received by Sept. 10.

Use the resource link to read the complete FTC proposal.

Inside Washington (08/06/2012)

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  • WASHINGTON (8/7/12)--The Consumer Financial Protection Bureau (CFPB) has given little hint of how it plans to distribute funds it collects from penalties it levies (American Banker, Aug. 6). The funds, such as the $25 million that the agency collected from Capitol One, go into the bureau's Civil Penalty Fund. According to the Dodd-Frank Act, which set up the bureau, the agency can use the money to make payments to fraud victims and fund consumer education and financial literacy programs. The agency hasn't indicated its plans and some congressional Republicans have expressed concern that some of the money will be used for grants to consumer groups. Last month, the CFPB ordered Capital One to pay a $25 million penalty to the CFPB and refund $140 million to $150 million to its customers for having pressured or misled them into paying for payment protection and credit monitoring when they activated their cards. …
  • WASHINGTON (8/7/12)--House Financial Services Committee Chairman Spencer Bachus (R-Ala.) wants federal regulators to give financial institutions 90 additional days to comment on proposed changes to capital requirements. Last Thursday he wrote Federal Reserve Chairman Ben Bernanke that "the rule is extremely complex so additional time for commenting is certainly justified.'' Bachus added that extending the deadline, currently Sept. 7, will "lead to more substantive comments, which in turn will be more useful to reviewers.'' The proposed rules, issued by the Federal Reserve, the Federal Deposit Insurance Corp., and the Comptroller of the Currency, would place additional requirements on large financial institutions including increasing the capital requirements for those with assets of more than $500 million. …
  • WASHINGTON (8/7/12)--The U.S. Department of Housing and Urban Development (HUD) and the Treasury Department have released the latest edition of their "Housing Scorecard." The departments compile and release information each month on key housing market indicators and highlight the impact of the administration's housing recovery efforts, including assistance to homeowners through the Federal Housing Administration (FHA) and the Home Affordable Modification Program (HAMP). The full report is available online at ...